Twenty years from now you will be more disappointed by the things you didn’t do than by the ones you did do. So throw off the bowlines. Sail away from the safe harbor. Catch the trade winds in your sails. Explore. Dream. Discover. -Mark Twain

Friday, January 29, 2010

The Great Puerto Peñasco Land Swindle!

-by El Gitano Peñasco, "The Peñasco Gypsy"

After a little more than six-weeks off, traveling about Mexico and the USA enjoying a long overdue vacation, I decided that upon my return to PP and writing for this blog I’d kick the new year off with a harangue that is, IMHO, something that needs to be openly discussed.

You see, as much as I truly love this nation, the people, their history, culture, this community, the food (and sauces), the beer, etc., I realized while I was on my ‘walk-about’ that there had been a major fraud perpetrated against the citizens of Puerto Peñasco and it mostly came from a select group of the ‘beautiful-people’ north of our border, specifically, ‘some’ Arizonans (and ‘some’ PP locals too).

For those new to this blog, to Puerto Peñasco (and indeed Mexico), the fact of the matter is that Phoenicians have been having ‘their way’ with PP for a very long time. Going back as far as I can remember (a couple decades) many Arizonans have been traveling down here for years, pretty much doing as they pleased, and throughout that era they also began snagging up property for centavos on the peso.

That’s fine, but for most the primary objective was to build their little casita(s) so they had a place to ‘play’ on weekends and holidays, etc. They never had any retirement and/or other long term living/business aspirations and only thought of Peñasco as their play-ground to be used ‘at-will’ with plans some day too ultimately dump their property and this community when it was convenient…

And that is the way it was for years until post 9/11. It was that event that turned this “quaint little fishing village” with its ‘drive-to’ feature from AZ into sort of a gold rush. Developers and real estate sharks began pouring southbound across the border, reminiscent of the scene in the 1987 Cheech Marin comedy movie “Born in East L.A.” when thousands of Mexicans were fixin' to rush the border northbound…

Next came the "land-speculators" who also started pouring in, but the ones I’m talking about are not the "high-roller" types but (mostly) Phoenicians (aka: middle to upper class incomes) who were being sold by mostly Gringo real estate gurus who also came down for the quick buck and were ‘pitching’ Puerto Peñasco as (e.g.) "the next Cabo. Buy today, sell tomorrow and make a fortune…"

There were even real estate brokers and reps who held sales-seminars up in the greater Phoenix area; buyers-fever (aka: greed) flourished, and before you knew it even the waitress at a local AZ Denny’s and her husband (with only a part time job) were trying to get in on the action.

Back in 2004-2005 I and others warned that the price increases, demand, etc. were not sustainable and that a crash was soon inevitable. But there was no shortage of developers, real estate folks and owners telling us that we were wrong and many of us were scorned for even suggesting such ‘nonsense’. Had 'they' had a chance they might have even enjoyed burning us at the stake!

After the Big Bang (the crash) hit and the last of the lingering pump and thumping leaches starting leaving town, most every one else finally realized the ‘ride’ was over-- including mi amigo Paco, who sadly had to acknowledge that his sweltering little 850 square foot casa wasn’t going to bring him $400,000 (USD) cash. Ultimately PP was abandoned by the carpetbaggers and left to fend for itself.

Of course it wasn’t just the developers and real estate parasites who were to blame, as they had an awful lot of help from certain "commissions" on both sides of the border, including newspapers and other predominate "authorities" with vested interests in the area who constantly released, IMO, ridiculous press releases and/or comments, assertions and statements such as (e.g.) "Rocky Point has over 3 Million tourist per year".

And so here we are in 2010 with many survivors clinging on with visions of sugar-plums dancing in their heads and, like children, oh so hopeful that when they awake from their long sleep things will return to ‘the good old days’. That is what I fear the most, that ‘they’ and their enablers will strive to return to ‘business as normal’ and ignore the potential future for Puerto Peñasco.

I say I fear that because right now, all across Mexico, real estate developers and businesses are gearing up for the economic rebound that is being forecast for Mexico by many professionals. The smart money seems to be on those ‘players’ who understand the causes and effects of the recent financial calamity and who, in part, will adjust their products, costs and marketing practices, etc., to a cautious but eager, enthusiastic and soon to be booming market.

This rebound includes a scramble for tourist and retiree dollars, too, but I can’t shake this feeling that once again most developers, businesses, new real estate sales agents and property owners here in Peñasco will continue to sit back on their laurels ‘thinking’ the bucks will start pouring into PP as if it were 2005 and once again they’ll ‘jack’ up the prices and tell anyone who’ll listen that PP "is destined to be the next Cabo and/or Vallarta…"

Take for example rental properties in Puerto Peñasco Vs. more popular destinations in Mexico, such as this place (one of many) I found three weeks ago for about $900 (USD) a month in Mazatlan:

“Comes with fridge / freezer, washer / dryer, stove, dishwasher, A/C… and private parking for two cars. The house has a large tiled patio complete with deck chairs and outdoor furniture...”

Here in Peñasco that same home, in a region sorely lacking the activities and amenities that Mazatlan offers (including Opera, numerous out-door cafés, great hospitals, movie theaters, night-clubs [real ones], Wal-Mart, major brand grocery stores, fine tailors and jewelers, pulmonias [open air taxis], countless beach front restaurants, etc.) would have an asking rental price of about $3,000 (dollars) a week (or month) if not more!

What most of these property-owners in PP don’t get is that places like Mazatlan, Ensenada, San Miguel de Allende, Puerto Vallarta, the Los Cabos area, etc. enjoy regional amenities 10 fold of what RP has to offer. These other regions also have developed very fine Expat communities over the years, and like it or not for many Gringo retirees, etc., that, too, is an attribute that PP cannot yet match.

Sometimes I don’t really know who to blame for many of the shortsighted, greedy and slothful so called ‘players’ here but an age old math illustration seems to describe them to a tee: If they were offered $1,000,000 (cash) today for their casita or a penny today and then double that amount each and every day for the next thirty days, they’d arrogantly and ignorantly snatch up the million today.

And as for that worn out Arizona ‘drive-to’ shtick thumped by many Gringo (and local) property owners, realtors, etc. (mostly from the 48th US State), forget about it!

First of all, that mostly only applies to buyers from Arizona and, OMG, for the difference in this rental example (Mazatlan home vs. a PP home) the savings alone would be about $2,100 (dollars) each and every month...

And with those extra pesos, amigos, if you needed or wanted to visit ‘North’ (for any reason) you’d be sipping Champagne and flying first-class, and do so often, from Mazatlan (and many other places in Mexico too) in about the same amount of time it takes to drive from PP to Phoenix!

Whether or not a new form of the “Puerto Peñasco Land Swindle” takes hold as more Phoenicians begin retuning and continue to ‘eat their own’ is yet to be determined.

But If Daniel Chavez and the gang get that airport fully operational and start bringing daily flights in filled with tourist and business folks from all around the USA, Canada and Mexico, most of whom have been to other parts of Mexico, then I’d bet the farm that after they sit through the Peñasco sales pitch they’ll mostly respond, briefly and with a little sneer on their faces, “Gracias, pero no gracias”!